German and Italian banks should move to UK if FTT introduced, says Boris Johnson

The Mayor of London said that banks across the Eurozone were likely to flock to the UK if the European Union went ahead with the new charge, which would tax trading by financial institutions.

"I would advise German, Italian and Spanish banks to move their HQs here to London so that they can escape the tax on their operations around the world and as for the French, they are already here," said Mr Johnson.

The Mayor has been a critic of the measure, which has also been challenged by the British government.

Industry estimates suggest the tax could raise more than £10bn, however banks have warned that it will lead to higher trading costs for customers and less liquid markets.

Among the biggest losers could be pensioners, who will face higher charges on their funds, costing them hundreds of pounds in lost income.

Supporters of the tax have countered that the funds raised could be used to help developing countries and support domestic welfare programmes.